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Argentina seeks debt extensions; Mexico central bank cuts growth forecast

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Argentina seeks debt extensions; Mexico central bank cuts growth forecast

* Argentine Finance Minister Hernán Lacunza said the government is seeking debt maturity extensions with the hope of stabilizing a rapidly depreciating currency and volatile markets. The government will look to extend the maturities on its short-term debt by three to six months in an offer applicable only to foreign and domestic institutional investors. It will also work to extend the repayment schedule tied to its $57 billion rescue package with the International Monetary Fund. The finance minister stressed that debt holders will receive full payment in all cases.

* Mexico's central bank reduced its economic growth forecast for 2019 to between 0.2% and 0.7% from a previous range of 0.8% to 1.8%. The GDP stagnation in the second quarter "indicates a deeper weakness of the components of domestic demand than previously estimated," the bank said. It now expects growth to pick up to between 1.5% and 2.5% in 2020, down from an earlier forecast range of 1.7% to 2.7%.

MEXICO AND CENTRAL AMERICA

* Mexican Finance Minister Arturo Herrera announced on Aug. 28 a decree cutting the commissions that can be charged by Afore pension administrators over the course of the present administration, El Financiero reported. Herrera said the reduction in commissions would bring them in line with international standards and would be equivalent to about 100 billion pesos through 2024.

* Mexican President Andrés Manuel López Obrador has named José de Luna Martínez as head of the Finance Ministry's Public Credit Unit, the department in charge of issuing government debt, El Financiero reported.

* Three of four Mexican socap credit unions are at risk of solvency problems and could have their licenses revoked by the CNBV industry regulator, El Economista reported, citing the chief of the credit unions federation. The group said regulators are closely monitoring 10 socaps, but that between three and four of those socaps are on "red alert."

* Mexico's Pronafim, a national financing program under the economy ministry aimed at microenterprises, will now focus on granting guarantees to microfinance institutions, allowing them in turn to access improved credit lines from development banks, El Economista reported, citing Pronafim general coordinator, Antonio Escamilla Díaz.

BRAZIL

* Banco Nacional de Desenvolvimento Econômico e Social booked net income of 13.8 billion reais for the first half of 2019, up 190% from 4.76 billion reais a year earlier. Income from equity interests rose 228.4% annually to 13.47 billion reais, driven by a 245.5% surge in the sale of investments.

* Banco Nacional de Desenvolvimento Econômico e Social President Gustavo Montezano said the state-run development bank will look to make early dividend payments to Brazil's Treasury and will repay easily 126 billion reais of debt to the government in 2019, Reuters reported. The bank is willing to generate funds by selling its stakes in a range of companies and by paying dividends, Montezano said after BNDES booked a 190% increase in its profit for the first half.

* Brazilian central bank chief Roberto Campos Neto said inflation in Latin America's largest economy is low, predictable and seems to be falling further, Reuters reported. "For a country that has had 82% monthly inflation, we now have predictable price indices, consistent with our targets and on a path to even lower levels still," he said.

* Analysts at JPMorgan are hesitant to blame global outcry over fires raging through the Amazon for the recent underperformance of Brazilian stocks, but said they "recognize that it has entered the list of yellow flags," Bloomberg News reported. The analysts reiterated their overweight rating for Brazilian equities.

* Brazil's central bank said it would develop and manage a crucial centralized addressing database for the country's instant payment system, which is due to operate round-the-clock in 2020, Reuters reported. The monetary authority said in a statement that centralizing the database would allow payments to be made securely and simply, using information such as phone numbers or email accounts.

* Brazil's financial system credit stock fell 0.2% monthly in July to 3.290 trillion reais due to weaker corporate financing, according to central bank data. Among companies, the loan portfolio fell 1.5% from the previous month.

ANDEAN

* Banco de Crédito del Perú launched a cash tender offer for its 5.375% and 4.850% outstanding senior notes due 2020. The bank plans to repurchase up to US$800 million of the 5.375% notes and up to 1.60 billion Peruvian soles of the 4.850% debt.

SOUTHERN CONE

* Under an Argentine government led by Alberto Fernández, the frontrunner in the October presidential elections, economic policy would look much like it did in the first of the three Kirchner governments, Guillermo Nielsen, a close economic aide to the Peronist candidate, said in an interview with Valor Econômico. This would mean "much lower" inflation levels, a "competitive" exchange rate, real interest rates of between 1% and 2% and a "tighter" grip on public spending, Nielsen said.

* Chilean vehicle financing company FORUM Servicios Financieros SA said its alliance with Nissan would end on Dec. 22 after both parties have failed to agree on the terms of the renewal, Diario Financiero reported, citing Forum chief Mauricio Fuenzalida. The carmaker is reportedly looking for an alternative financing company in Chile.

IN OTHER PARTS OF THE WORLD

* Asia-Pacific: China Construction Bank H1 profit up 4.87% YOY; Shinhan Card issues ESG bonds

* Middle East & Africa: Tadawul's full inclusion on MSCI emerging markets index; Israel holds rate

* Europe: Johnson to suspend UK Parliament; UBS reshuffles; Italian parties strike deal

Helen Popper contributed to this article.

The Daily Dose has an editorial deadline of 8:00 a.m. São Paulo time, and scans news sources published in English, Portuguese and Spanish. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.